Taiwan Semiconductor Manufacturing Co (ADR) (NYSE:TSM) (TSMC) on Thursday reported better than expected financial results for the third quarter 2025, as its earnings reached a new record on artificial intelligence (AI) semiconductor demand.
The company’s earnings for the period climbed 39.1% year over year to NT$452.3 billion (New Taiwan dollars), surpassing the NT$417.69 billion analyst consensus estimate provided by LSEG.
Its revenue for the quarter, meanwhile, rose 30.3% to NT$989.92 billion, which also exceeded the Wall Street forecast of NT$977.46 billion.
TSMC also raised its 2025 revenue growth forecast to the mid-30% range from its previous estimate of about 30%.
Wedbush analysts noted that, in their opinion, the company’s gross margin of 59.5%, which topped the midpoint of TSMC's previous guidance by about 200 basis points, was more significant.
“While a portion of this margin strength can be attributed to favorable exchange rates, we see solid results as a reminder of TSMC's advantageous positioning as the only meaningful supplier of silicon built on the most advanced processes," the analysts wrote in a note to clients.
The Wedbush equity research team added that they expect this dynamic will continue to hold true over the next few years, potentially creating some upside to their margin expectations.
The analysts reiterated their ‘Outperform’ rating on TSMC stock, while holding their price target steady at NT$1,700 per share, saying the stock’s valuation is relatively attractive compared with other AI related semiconductor investments.
Taiwan Semiconductor stock rose nearly 2% in pre-market trading in New York on Thursday.